Bizo CEO Russell Glass Says Data Driving B2B Demand-Side Optimization, Too

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Russell Glass is CEO of Bizo, a business-to-business ad network.

Bizo CEO Russell GlassAdExchanger.com: Judging from your June release, Bizo business appears to have momentum. Has B2B been slowed in the recession or never stopped? What are you expecting from the economy in the next 12 months?

B2B has been hurt by the recession, but it has kept pace with the rest of the industry and its projected to take an increasingly larger share of the overall online advertising pie in future years. We call it a high-growth $4 billion business, but I've seen numbers placing it at over $5 billion for 2009 with steady, 15-20% growth over the next 12 months and beyond.

How is Bizo differentiating itself from other B2B ad networks? Is it technology or service? Please explain.

We like to think it's both. We work very hard to provide the best possible service and results to our advertisers, but our main differentiator is our technology. Our platform collects data from our B2B publishing partners and other company information sources, and we then organize and anonymize that data to create bizographic profiles that include such features as job function, industry, company size and seniority level. We're then able to use that data to target advertising across our growing B2B network without compromising individual online privacy. It's a proven model - it provides better results at better rates than competing offerings - and it's all dependent on the strength of our technology and the strength of our network.

Why did you spinoff ZoomInfo's ad platform to form Bizo?

We saw a hole in the market that we wanted to go after: bizographic targeting for the online B2B market. Although there was significant IP that ZoomInfo was able to bring to the table, that wasn't the business that ZoomInfo was in so it made sense to spin Bizo out into a separate business. It's all about focus for both companies.

For publishers, how do you increase their revenues without cannibalizing sales? Isn't channel conflict inevitable?

Good question. Our model is highly focused on the publisher. Because our sales are based on audience targeting vs. site targeting, we never compete with the publisher sales teams who are selling their site brand. In fact, we have advertisers who ask us for specific publishers, and we turn them over to the sales teams of our partners. At the same time, we're giving our publishers an opportunity to monetize their audience in new ways, without compromising that audience's privacy or user experience. With Bizo, a B2B publisher can extend their audience reach, monetize audiences off site, and increase the value of their unsold inventory by an average of over 300%.

What's your view on ad exchanges? Using any? If so, which ones work?

We think there is tremendous value and efficiency to exchanges on both the buy and sell side. Bizo currently gets more than 30% of its audience reach - and a lot of its margin - by buying and arbing supply from the exchanges. There are issues however, primarily around quality and transparency. Bizo's business is using data to improve the quality and value of an impression, and we consistently do so - by over 300% on average. The problem with exchanges is that making a $0.25 CPM impression worth $0.75 or even $1.00 doesn't do much for us. Our customers in B2B are looking for us to take a $5.00 impression and make it worth $15.00, and they're sensitive to quality. I believe the exchanges need to improve their quality and transparency across the board to break through.

How will real-time bidding and demand-side optimization affect your business?

It's already affecting our business in a huge way. We're spot-bidding 65% of our impressions today through the waterfall/default model. In some ways, we've created a loosely coupled exchange of our own through how our network partnerships are structured. We rarely take ownership of inventory, and we almost always have CPM floors in place where our publishers can dictate the rules that allow us to be on the top of the waterfall. We can use this model because of how high our average CPMs are for publishers - well in excess of $3.00 net. With respect to the demand-side optimization, our data drives demand-side optimization because the business audience is so valuable, and it's already being used by many of the big optimizers and networks to improve their campaigns.

How does Bizo address the purchase funnel for marketers?

Bizo is a display advertising network, so we're really the most focused on the top of the funnel - how do you drive demand and awareness for your products. There has been a ton of research of late from comScore, Microsoft, Yahoo and others that show how effective display advertising is in creating brand awareness and driving the top of the purchase funnel. Bizo is focused on helping B2B marketers take advantage of this phenomenon in an efficient way by targeting the specific audiences that they care about for their products and services. Additionally, Bizo has seen a lot of success with retargeting non-converts across our B2B network of sites, and focusing certain campaigns on sites where our audience members are showing some purchasing behaviors. These capabilities are much more aligned with the consideration and purchasing stages of the funnel, although it's not our primary focus.

For targeting, where do you get your data sets? Do you use data exchanges? Do they work?

We get our data through our platform which processes and normalizes data from the 300-plus publishers in our network and other data sources. We've processed billions of data points and we can now target over 45 million users in more than 200 targetable segments on a monthly basis. Yes, we sometimes use small business data from exchanges, but only rarely and for broadly targeted campaigns because it's not as targeted as our data is and it doesn't tend to work as well. From what we can tell, the data exchanges tend to be the most effective in high-value, "in-market" categories such as automotive and travel. We make our targeting data available to other ad networks and exchanges to help them more effectively work with the B2B market, and we will be making some significant announcements about this in the near future.

How does your revenue model work? Revenue share, transactional, performance, other?

Our advertisers pay us on a CPM, but we optimize to whatever metric they're looking for (actions, loads, time on site, clicks, etc.). We share revenue with our inventory and data provider publishers who benefit from the higher-than average CPMs due to our targeting. On average, our publisher partners are getting over $1.50 CPM for their data and $3.00 for their inventory. If they provide both, it's over $4.50 for the impressions.

What are the challenges of running a B2B ad network versus a B2C ad network?

There are a few challenges. First, the B2B industry can get very niche - environmentally friendly dry cleaners would be a good example. There are marketers out there that are looking to reach every EFDC on the planet, and our goal is to provide them an efficient way to do so. However, scale becomes a problem there. If there are only 50,000 of these guys, there just aren't many impressions to go after, and you can pretty much throw optimization out the window. The upside is that the CPMs go way up in these niches, and our partners know how to sell to these buyers. The second issue is that the B2B industry is still well behind the B2C industry in their "move to the web," which makes some of our sales cycles longer than you'll typically see in the B2C world. That all said, going after a narrower market can be a huge benefit because we are able to focus and dig deeper to provide successful solutions than we would otherwise be able to. Also, because we view what we do as an audience-targeting platform based purely on B2B audience data - as opposed to a typical ad network - we can be much more flexible with our business model.

Follow Bizo (@follow_bizo) and AdExchanger.com (@adexchanger) on Twitter.

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